Sharon Claydon (Newcastle, Australian Labor Party) Share this | Hansard source

( I rise to join with my Labor colleagues on this side of the House in our complete opposition to this bill. We have a series of grave concerns with the Turnbull government's Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018. Firstly, it's an unfair bill that actively undermines Australia's world-class education system. It would penalise women, disadvantaged and vulnerable Australians, and hurt regional communities and economies like mine in Newcastle. It's yet another example of this government's relentless war on young Australians. It's telling that only two government members were willing to stand up today and back this bill. When government members can't even bring themselves to support their own legislation, you know something is wrong.

The bill proposes a number of changes to the Australian income contingent student loan scheme, HELP, formerly known as HECS. It sets a new, lower threshold of just $45,000 at which students must start repaying their student debt. It also introduces a lifetime limit of $104,440 on how much students can borrow for their tuition fees. This bill represents a terrible betrayal of young Australians, as it will make it harder for them to gain higher education. It will be the final nail in the coffin for some with university aspirations. From the beginning Labor had concerns about the impacts of this legislation, particularly for low-income earners, disadvantaged students and, as I mentioned before, women. We were concerned about the impacts it would have on young people in regional areas and the communities they live in, so we sent it to a Senate inquiry for consideration. Regrettably, the inquiry did little to allay our concerns.

The first measure proposed in the bill is to lower the repayment threshold to $45,000. This is the second attempt by this government, after failing to reduce the threshold to $42,000 last time around. Labor supports HECS-HELP. There is no argument from us on that front. We believe in the principle that Australians should contribute towards the cost of their education, from which they and all of us benefit, but we agree with those many people who made submissions to the Senate inquiry that $45,000 is simply too low. As the Council of Australian Postgraduate Associations pointed out in its submission to the inquiry, $45,000 is only slightly more than half the average wage; it is in fact only $9,000 more than the minimum wage, as the Australian Council of Trade Unions rightly stated.

On this income, take-home pay is $37,928 a year, a little over $700 a week, after tax and Medicare levies are subtracted. Once you cover the basic costs of living, including—let's not forget—the skyrocketing rents many of these students are paying, transport, food, insurance and ever-increasing power bills, there is precious little left. For many, every spare dollar is funnelled into scraping together a deposit for a home, which could easily top $100,000 in many parts of the country. That is in no small part due to the Turnbull government's absolutely dogged refusal to do anything about the outrageous tax concessions provided to support property investors over and above what we offer to first home buyers. Incredibly, many young people are trying to do all of this with the extra financial burden of raising a young family at the same time. You can see no clearer example of pressure on our young people.

Yet, in another stunning display of just how out of touch it is with Australians on low incomes, the Turnbull government has decided it is completely fair and reasonable to start taking even more money from these people—utterly unbelievable!

It's no wonder that young Australians are furious with the Turnbull government. They have, of course, every right to be, especially given that a large number of government members went through university at a time of free education, bought their houses with the help of government subsidies and now get to rake in the tax benefits of negative gearing and capital gains tax concessions at the federal budget's expense.

Labor doesn't believe that we should make students start repaying their debt at the same time when they're trying to start their careers and start families and when they're earning, often, the very lowest rates in their respective professions. Labor also has grave concerns about the impacts of reducing the HELP repayment thresholds on disadvantaged Australians and discouraging them from ever undertaking higher education in the first place. This is particularly relevant for many communities in and around the Newcastle and Hunter region, because those areas are characterised by very significant disadvantage and, indeed, lower levels of education attainment. I'm extremely proud of the equity record of my local university, the University of Newcastle, where 27 per cent of students come from low socioeconomic backgrounds. Many are the first in their family to go to university. But these are exactly the kinds of people who are going to be hurt by this bill, as they are more likely to decide against higher education rather than put themselves in a precarious financial situation.

In a submission to the Senate inquiry on this bill, the University of Newcastle raised concerns that these cohorts are much more likely to be sensitive to price—I couldn't agree more—and that they are disproportionately likely to decide against taking on higher education if the repayment threshold were lowered. The submission also made the important point that, for some students, repayments could kick in before they even have completed their studies. This would only serve to further intensify the financial pressures potentially affecting completion rates and graduate outcomes. This will be a great shame for our universities and a huge loss for our region. When you add these measures to the estimated $69 million that the government is ripping out of the University of Newcastle through the MYEFO cuts, there's going to be a lot of pain ahead for our community.

I'm also very concerned about the disproportionate impacts this lowering of the HECS repayment threshold will have on women. As the President of the National Union of Students, Mr Mark Pace, stated:

We know from the National Tertiary Education Union's submission to this Senate inquiry that 60 per cent of all Australians with outstanding HELP debt are women and that two-thirds of the Australians who will be dragged into the debt pool with the new proposed repayment thresholds will also be women …

I agree with Mr Pace that this is yet another reason for rejecting this bill.

I'd now like to turn to the proposed cap in the bill which would put a lifetime limit of $104,440 on the value of higher education that can be supported through the loan system. For students doing medicine, dentistry and veterinary science, that cap would be $150,000. The new HELP limit would apply to HECS-HELP loans, FEE-HELP loans, VET FEE-HELP loans and VET student loans. Again, this is a measure Labor cannot support. As many people giving evidence to the Senate inquiry pointed out, many prospective students will find that there simply isn't the scope to take on further studies or to expand their expertise into new areas. Others pointed out that the cap is likely to hurt people who haven't taken a traditional pathway to study and many have taken extra courses to achieve their academic goals. The proposal for a lifetime cap also stands in stark contrast to the unavoidable reality that education is becoming a lifelong process, something that you don't bid farewell to in your early 20s. In fact, continuous upskilling will be increasingly important for people who want to remain competitive in a highly dynamic jobs market. Again, this proposed measure will have a disproportionate impact on regional communities like mine. As the University of Newcastle points out in its submission, this limit will hurt our region's economic transformation by preventing some people from engaging in critical retraining and reskilling, especially in the high-cost fields like STEM and health, which may require specialist postgraduate qualifications.

This bill provides yet more evidence that the only ideas this government has shown for higher education are to levy cuts and to force students to pay more. Just look at its destructive plan for university deregulation, which would have led to $100,000 degrees and lifelong debt sentences for students. Or perhaps we could consider the bill that preceded this one, which included $2.8 billion worth of cuts. Of course, the Senate refused to pass this. But, in a shameless display of its true 'born to rule' character, the government completely disregarded the will of the parliament and snuck $2.2 billion worth of cuts through the back door in the midyear budget update.

In contrast, Labor has a fantastic legacy of which I am very proud. When we were last in government, we increased funding for universities from $8 billion to $14 billion each year and introduced a demand driven funding system. This saw an additional 190,000 students get a place at university, many of whom were the very first in their family to ever set foot on a university campus. Investing in education is one of the best means we have to drive productivity and economic growth, especially by encouraging people from disadvantaged backgrounds to go to university, and we know that these reforms work.

As Universities Australia presented in its submission to the inquiry on this bill, there was a 106.5 per cent boost to people with disability undertaking undergraduate study. In the same time frame, there were 89.3 per cent more Indigenous students, 55 per cent more low socioeconomic status students and 48.3 per cent more regional and remote students. It is unquestionably a positive thing, not just for the individuals that improve their education levels and their life opportunities but for the entire country, because investment in education has flow-on effects for the whole society. This is backed up by recent figures from the OECD, which showed the Australian public, not individuals, benefit most from higher education. In fact, this OECD work shows that the public rate of return from tertiary education in Australia is twice the rate of return to the individual, despite the fact that individuals shoulder more of the cost.

The Turnbull government wants you to believe that the current HECS arrangements aren't sustainable. They want you to think that we need to rein in the amount of education that people can undertake and make them start repaying their student loans sooner. I'll tell you what's not sustainable: giving people who earn over $180,000 a year a tax cut while you're hiking up taxes for people on $30,000—that's not sustainable. Refusing to act on the billions of dollars of cash handouts that are going to Australian shareholders who don't pay any tax—that is not sustainable. And doing absolutely nothing to rein in excessive tax concessions for property investors—that is not sustainable. But I'll tell you what's really not sustainable: hiking the national debt to more than half a trillion dollars and then hatching a diabolical plan to shovel a further $65 billion out the door in corporate tax cuts, because that's what this bill is really all about. It's not about a crisis in the HECS or HELP scheme; it's about a government desperate to pay up on its promise to big business. This is a shameful bill before this parliament. I stand strong and proud with Labor in our opposition.

See this speech in context